(Solution Download) If interest rates rise bond prices will fall Given the


If interest rates rise, bond prices will fall. Given the following pairs of bonds, indicate which bond?s price will experience the greater price decline.
a) Bond A Coupon: 10%
Maturity: 5 years
Bond B Coupon: 6%
Maturity: 5 years
b) Bond A Coupon: 10%
Maturity: 7 years
Bond B Coupon: 10%
Maturity: 15 years
c) Bond A Coupon: 10%
Maturity: 5 years
Bond B Coupon: 6%
Maturity: 8 years
d) Bond A Coupon: 10%
Maturity: 1 year
Bond B Coupon: zero percent
Maturity: 10 years

 







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